UNIVERSITY OF THE WITWATERSRAND, JOHANNESBURG
HISTORY WORKSHOP
STRUCTURE AND EXPERIENCE IN THE MAKING OF APARTHEID
6 - 1 0 February 1990
AUTHOR: Nancy Clark
TITLE: Labor at the State Corporations During World War 11
LABOR AT THE STATE CORPORATIONSDURING WORLD WAR II
NANCY CLARKCalifornia Polytechnic State University
Sari Luis Obispo
South Africa's state corporations are not commonly
connected with problems of labor control. The state
corporations, with all the considerable instruments of South
African state control at their command, seemingly have
unquestionable power over their workers. The only issues of
public concern over the state corporations' labor policies
revolve around the use of jobs S B political rewards for
loyal whitest or alternatively, as a means to increase the
economic base of the politically powerful white Afrikaner
community. Indeed, few incidents of labor unrest have
occurred during the history of the now numerous state
corporations. Yet this peace has not been automatic. During
th« war years, both the Electricity Supply Commission
(Eicom) and the South African Iron and Steel Corporation
(locor) suffered labor unrest and serious challenges to
their labor policies. Both came under attack from black and
white workers, skilled and unskilled. The policies which
later insured the corporations relatively Quiescent
workforce were forged during this period, under the extreme
pressures of wartime production and worker rebellion.
Unsuccessful at simply imposing their will upon the workers,
the state corporations used a variety of strategies to
control their employees including coercion, manipulation and
outright force. Finally, by the end of the war, both state
corporations Here forced by worker resistance to reshape
their labor policies. Facing the possibility of continuing
unrest and the disruption of production, with their
attendant financial and oolitical costs, the state
corporations devised labor policies to avoid rather than to
overcome future confrontations.
Prior to World War II, the managers of the state
corporations considered labor policies primarily in terms of
the costs of operations. Since their inception in the 1920s,
both the Electricity Supply Commission <Escom> and the South
African Iron and Steel Corporation <Iscor> fought against
the criticisms of private industry to establish their
economic viability. <1> In the face of charges of government
protectionism and consequent overcharges, the state
corporations strained to lower their costs and to provide
goods and services at competitive rates. One of the
principal methods used at both Escom and Iscor to lower
costs was to engage low cost labor including unskilled
whites as well as the politically unpopular use of black
workers, fit the beginning of the war, however, concerns over
market shares and competition were replaced with those of
(1) Easeom was established by statute in 1922, although notformally initiated until 19S3s Iscor was established bystatute in 1928 and commenced production in 1934. On thepre-war period, see Nancy Clark, "South African StateCorporationss "The Death Knell of Economic Colonialism'?,"Journal of Southern African Studies. Volume 14, No. 1,October 1987.
insuring continuing production. Neither corporation was
guaranteed replacements of existing plant from overseas
should there be a breakdowns and Iscor, formerly supplying
only one-third of South Africa's steel, was suddenly called
upon to produce all of the country's requirements.(£> While
the importance of costs receded, the imperative to keep
production going on the factory floor became paramount.
At the same time, industrial production methods and the
organization of the working class, both black and white,
were rapidly changing inBide the country. New technologies
in the production process were enabling employers to engage
workers with limited, specialized functions; so-called
"deokilled" positions. This trend, especially noticable in
the engineering industry, threatened the position of the
skilled craftsmen who had heretofore performed numerous
functions, now being disaggregated into separate positions
on the factory floor. As a result, the crafts unions were
moving to consolidate their positions while the
"operatives,M as the new employees were often called,
likewise sought representation to protect their interests.
Employers fought these efforts, hoping to lower costs
<£) Prior to the war, most of South Africa's steel wassupplied from overseas by European firms. In the latter halfof the 1930s, Iscor produced only 300,000 tons of raw steelper annum out of a total consumption close to 900,000 tonswhile the rest was imported. After the declaration of war,most of these imports were quickly curtailed since nearlyhalf came from Germany and the countries under its control.Report on steel production, 12 August 1946, HEN 430, 3£TC,Volume II, SABA.
through the use of operatives and throughout the war
industrial labor relations proved volatile. <3)
For the state corporations, the imperative of
continuing production and the changing nature of the
production process and consequently of labor relations
inside the country, combined to force a re—examination of
labor policies. The state corporations, especially Iscor,
were moving toward increasing mechanization and "de-
ekilling" in production. While they hoped in this manner to
lower production costs in the long run, during the war they
were concerned to avoid any disruption of production. The
state corporations, however, were not immune to the
struggles within the work force over de-ski 11 ing. Thus
during the war, the state corporations sought new policies
to meet workers' demands while trying to keep production
going. Rather than refuse the workers outright, risking a
strike and disruption of production, the state corporations
began to fashion policies designed to isolate and coopt
their work force and thus avoid confrontations. It was
largely this effort -— to avoid confrontation with the work
force — that shaped the direction of state corporation
development during the war and into the postwar period.
<3) See especially, Jon Lewis, Industrialisation and TradeUnion Qrpaniwation in South flfrica. 19£4—1955 (Cambridge,1984) ; and Eddie Webster, Hast in a Racial Wouirls LabourProcrF3w;<~ and Trade Unionism in the FoundriBS (Johannesburg,1985). For a broader perspective of labor control and workerstruggles at the point of production, see Michael Burawoy,Manufacturing Consent (Chicago, 1979) and The Politics ofProduption (London, 1985).
fit the very beginning of the war, great demands were
placed on Iscor and Escom to help South fifriea survive the
conflict. although neither the state corporations nor any
local manufacturers could construct the major weapons
necessary for defense — ships and aircraft — they could
produce ammunition from Iscor's steel and Escom' s
electricity which the government could exchange for more
sophisticated materiel. The South fifrican government
therefore agreed in June 1940 to supply the fillies with LI
million worth of munitions each month manufactured from
Iscor' B steel. <4>
But these demands were not placed on Iscor and Eacorn,
and their employees, alone; bath corporations relied on
private firms to augment and, in Escom's case, even to
supervise production. While struggling to obtain a
significant share of the markets for their goods in the pre-
war period, both state corporations had entered into
production and marketing agreements with private firms.
During the war, the state corporations could look to their
private partners to help meet production requirements. More
important, their connections with the private firms and the
division of production agreed upon had serious ramifications
for their labor policies. In Iscor's case, it was the
private firms who faced the brunt of problems over
(4) Ibid. , p. 140.
deskilling due to the more complex nature of the work to
which they were assigned by the state, find Eseom'5
relationship with the private Victoria Falls Power Company
(VFPC) was so close that the private company actually
managed the bulk of Escom's employees. Ironically, while
state corporation policies towards the private firms were
designed originally for the latter's benefit, during the war
years- their dominance in production and marketing drew them
into significant and protracted labor problems along with
the state corporations.
Prior to the war, H. J. van der Bi.jl, Chairman of both
Iscor and Escorn, had agreed that Iscor would specialize in
producing raw steel and serni—finished goods, letting the
private firms do the finishing work and the marketing.
Indeed, as van der Bijl complained at the beginning of the
war, the private companies had prevented him "from
developing, to the extent I could otherwise have done, that
portion of the steel industry which one could expect to
follow in the wake of a basic industry like Iscor;"
specifically, the heavy engineering industry. (5) He had
gone as far as proposing the privatization of Iscor in the
hopes of defusing private opposition to the entry of the
corporation into such endeavours, but by the beginning of
<5> Van der Bijl to Hofmeyr, e January 1940, MED SS, 3/33,Volume I, SQBO.
the war, the situation remained the samei Iscor was still a
"wholesaler" of raw arid semi—finished steel. <6>
To &n even greater extent than before the war, the
corporation was farming out the finishing work to private
companies and largely restricting its own operations to the
production of raw steel. Iscor had been designed as a fully
integrated steel mill to produce increasingly complex goods
using itB own productsa The corporation smelted raw iron
ore, turning it into rough steel shapes (billets) which were
further processed into smaller and more complex pieces of
steel. During the war years, the process was cut short as
Iscor was called upon to produce practically all of the
steel for use inside the country; the private companies were
not capable of smelting their own steel and could not count
on shipments from overseas. As a result, Iscor had to
concentrate on turning out steel as Quickly as possible,
diverting all energies to putting the raw steel into a form
which was usable by private engineering firmsj namely,
<6) Prior to the war, van der Bijl had proposed to put upfor sale to the public five million Iscor shares, themajority of the shares held by the government. He wrote toHofmeyr later that his reason for doing so was that "Theindustrial community object strongly to Iscor doing anythingbeyond the making of raw iron and steel products, on theground that practically the whole of Iscor's shares belongsto the Bovernment." Ibid. Furthermore, he wanted toestablish a new company, the African Metals Corporation<Rmcor), in partnership with the private steel firms toproduce more than twice Iscor*s annual output of raw steel.General Manager Cape Town to London Board of Directors, IBand £1 April 1939, 0M0 3/1/124, Standard Bank Archives. Dueto the war, both plans were abandoned for want of capitaland machinery.
8
billets- And at the same time, the corporation cut back on
its more complex processing operations which would have used
the billets sent to the private firms instead. By 1943
Iscor's output of steel billets had risen 35% since 1939
while the corporation cut back on its own limited production
of semi—finished goods — such as merchant bars — as well
as its finished rails (dropping from 66,312 tons in 1939 to
£3,753 tons in 1943), thereby leaving an even greater
proportion of the finishing work in the hands of private
companies than had been the case before the war-(7)
Escom, likewise, was closely connected to private
producer©, in this case the Victoria Falls Power Company
(VFPC). The VFPC operated all of Escom's stations on the
Rand and passed Escom*s electricity into a "grid" system,
connected with its own power stations, to supply the
industrial and mining areas on the Rand. Escom had
established this relationship in order to gain entry into
the Rand electricity supply market which was completely
under the control of the VFPC. More important, the VFPC had
exclusive contracts to supply all of the gold mining
companies along the Rand and the companies had initially
opposed the prospect of being supplied with what they feared
would be higher-priced state generated electricity. During
the war, the government was likewise directly concerned that
(7) Iscor Memorandum in Regard to Production and SalesFigures for the Financial Year ended 30 June 1944 Cincludingfigures for 1941-44], HEN 3266, 509/8, Volume 7A, S0B«.
the gold mines obtain cheap and reliable electricity to
produce the metal, crucial to the financing of the war
effort. However, the company's close relationship with the
miriing companies over labor policies ultimately proved
detrimental. The V/FPC, with stations neighboring the gold
mines, had always maintained identical wage rates and
amenities including compounds and the signing on of contract
worker©, arguing that the work was similar. During the war,
however, this argument backfired causing one of the most
widespread strikes of the war and threatening costs as well
as production. By the end of the war, EBCorn was poised to
correct those policies and thereby not only to insure
reliable production but also to reduce the inflated costs of
electricity supply.
Escorn and the Demands of the Black Working Class
The pressures of wartime production and the dramatic impact
of labor relations on the war effort were best exemplified
by the crisis and strike at the Rand electricity stations in
.1.944. In addition to fueling the ammunition and war materiel
workshops along the Rand, these power stations were
primarily responsible for providing electricity which
insured the continuing production of gold inside South
Africa. In addition to South Africa's steel, gold was
crucial to the financing of the war effort. However in 1944,
black workers threatened production by staging a massive
10
strike at the nearby power stations. Many of the blacks at
these stations worked in engineering workshops attached to
the VFPC and performed tasks similar to those in the
engineering, not the mining, industry. The terms of their
employment, however, as implemented by the VFPC on behalf of
Escorn, were identical to those at the mines. The workers
were hired on a contract basis, housed in compounds and
treated as migrant workers. It was their proximity to the
mineworkers, the VFPC argued, which necessitated this policy
so that the Mineworkers would not think of demanding more
for themselves. By the end of the war, however, Escorn would
decide that the identity of workers* interests on the Rand
was the problem, not the answer to labor control which was
to be isolation.
The trouble at the power stations began in November
194S when the government raised the minimum wage for blacks
working in urban industries. Reflecting the terrible
inflation which wracked the country — the cost of living
rising 50"/. during the war — and hit urban areas hardest,
Wage Determination No. 105 more than doubled the minimum
wage for unskilled black workers in the Johannesburg area in
an effort to ameliorate the conditions of urban blacks;
however, the mining industry and the power station workers
were specifically excluded despite the fact that they, too,
worked in urban centers.
11
fit this time, government officials feared any
disruption of service and considered extending the wage
determination to the power station employees. It was the
private company, the VFPC, which objected, fearing a rise in
its costs and possibly a drop in the fantastic profits it
was reaping at the time unbeknownst to the government. The
company consistently linked its interests to those of the
mining industry, arguing that any raise in its employees
wages would be followed by similar requests at the gold
mines.(8) Stalling for time, and in response to similar
grievances at the mines, Prime Minister Smuts promised to
initiate a government inquiry into their wages in order to
judge if the wage determination should be extended. <9> In
the meantime, the workers agreed to wait for the
government's findings before taking further action.
But the government commission took over a year
investigating the situation with the result that the power
station workers went on strike in protest. The chairman and
the secretary of the fifrican Sas and Power Workers Union, 8.
Makabeni and D.K. Mfili, respectively, had been working to
convince the commission of the workers* right to higher
wages and counselled the union members against striking;
nevertheless, in December 1943 they warned the government
<B) Ibid.(9) VFPC to Minister of Mines, 19 January 1943, MNW 1144,mrn94/13; Memo by D. L. Smit, Secretary of Native Affairs, 2July 1943, NTS £SE5, 44£/£eO/l, SOBfi.
12
that the workers were prepared to go out on strike if the
government report was not soon issued. By mid-January,
1944, the workers were pressing for a strike against the
recommendations of union officials who wanted to continue
negotiations. <10) Without benefit of union sanction, over
2000 workers at five of the VFPC operated stations scattered
along thB Rand and in Vereeniging simultaneously went on
strike for higher wages on £1 January 1944. Beginning at 1
a.m., 200 black workers at the Brakpan station went out on
strike demanding higher wages; by 6 a.m., the black workers
at the other two Rand stations at Simmer Pan and Rosherville
were also on strike, and by 1 p.m., the VFPC notified the
government that the workers at the two stations in
Vereeniging were also out. <11) 011 of the VFPC-owned
stations as well as Escom's Klip and Vaal stations were
affected leaving only Escom's Wit bank station untouched.
With five of the six power stations servicing the Rand
out on strike, South Africa's gold mining industry as well
as most of the country's defense and engineering operations
faced the threat of being closed down. The company had
convinced the government that serious measures should be
taken in the face of the strike and the Minister of Mines
(10) VFPC to Minister of Mines, IS January 1944, Memo byft.O. Eales, 20 January 1944, MNW 1144, mm94/13, SOBA; "VFPNatives Threaten to Strike To-day," Rand Daily Mail. 21January 1944.(11) Cable from Minister of Labour, Cape Town to Departmentof Labour, Pretoria, 21 January 1944, MNW 1144, mm94/13;Deputy Commissioner SAP to Commissioner SfiP, 2 February1944, NTS 7661, 166/332, Part I, SfiBfl.
13
agreed to provide the company with members of the Native
Military Corps to man the power stations.(IS) The company
was well satisfied with the situation, believing that the
strike "would fizzle out in the course of a few days."(13)
The Prime Minister, however, saw the use of troops as a
temporary measure and, while promising police protection for
any strike breakers, refused to keep the soldiers at the
stations for more than one day.(14) The mine owners
likewise refused to provide any temporary labor and the
company was forced to negotiate with the workers or risk
shutting down its stations. (15) While the government was
prepared to protect electricity supply services. Smuts waB
still not convinced that the VFPC should be defended at all
costs.
Nevertheless, the government provided the company with
a powerful advantage during its negotiations with the
workers* union: the police completely surrounded the
affected compounds and were, in effect, keeping the workers
isolated from each other and their union, the flfrican Gas
(IS) VFPC to Minister of Mines, 31 December 1943, 12 and 26January 1944, cable from Minister of Labour, Cape Town toDepartment of Labour, Pretoria, £1 January 1944, MNW 1144,rnrn94/13, SOBO.(13) Secretary Native fiffairs to Minister Native Offairs,££ January 1944, NTS 7681, 166/332, Part I, SABA.<14> Cable from Minister of Labour, Cape Town to Departmentof Labour, Pretoria, 21 January 1944, MNW 1144, mm94/13,SABA.<15) Secretary Native AffairB to Minister Native fiffairs,£2 January 1944, NTS 7681, 166/332, Part I, SABA.
14
and Power Workers Union.(16) As the union chairman, G.
Makabeni, later complained, the workers were trapped in
their individual compounds and the government refused to
allow them to meet with the union leaders? the compounds
being used as "a glorified concentration camp."(17) The
General Manager of the VFPC, T.B. Otley, met under the
auspices of the police with men chosen from the compounds,
but not with union leaders, and offered to make
retrospective any wage increases which the government might
finally recommend.(18) Under these circumstances, he
succeeded in persuading the workers to wait for the
government's report in the hopes that its conclusion would
bring them higher wages.
By the time that the report was completed in 1944, the
government was more concerned with the costs of gold mining
than the reliability of service and backed the VFPC
position. The war in Europe was winding down and Smuts and
his Cabinet members were already looking toward the
country's postwar economic recovery. Any Day raises for the
electricity workers would affect, in the words of the
Government Mining Engineer, H. S. H. Donald, "the capacity of
the mining industry to contribute a sufficiently large sum
to Revenue Recount." This would shake the government's
(16) The Union did not organize the strike. Makabeni toFood Canning and Allied Workers Union, 28 January 1944, NTS7681, 166/33S, Part I, BfiBfi.(17) Ibid.(18) VFPC to Minister of Mines, £6 January 1944, MNW 1144,mm94/13, SfiBfi.
finances, as he flatly stated that, "It has become
increasingly apparent for some years that the interests of
the state in the gold mines are considerably greater than
the interests of the shareholders."(19) Not only would the
electricity company paBS on an additional L70,O00 in costs
to its mining Customers, but such pay raises could prompt
similar action at collieries adjacent to the power stations
— adding another (.800,000 in costs — and, ultimately, to
the nearby gold mines themselves. <20) Thus when the members
of the WitwaterBrand Mine Natives" Mages Commission
completed their report — sanctioning worker demands for
higher wages — the government rejected their findings out
of hand. <Sl) RB the Prime MiniBter, General Smuts, noted in
rejecting the Commission's findings, "the mining industry is
so to speak "the ark of the covenant.'"(22)
In the face of worker resentment of government actions,
officials braced for further strikes. Following the Prime
Minister's announcement that only a small raise would be
given — to the power station and mine workers alike —
"Increased Working Costs on Mines," by the GovernmentMining Engineer, S February 1944, MNW 1144, mm94/13, SflBfi.(£0) Otley at interview with Gold Producers Committee, 6January 1943, Minutes of meeting between Smuts, Minister ofNative Offairs and Minister of Mines, 7 January 1943, NTS7681, 166/332, Part I, SRBfi.(21) The commission recommended that the standard wage forworkers at the VFPC should be raised from 12s. Per week witha cost of living allowance of 4s. to £3s. plus a 5a. cost ofliving allowance. South flfrica, Report of the UitwatersrandMint? NatiVBB' Ulapga Commission 1943, UG21-1944, p. 4O.<££) Minutes of meeting between Smuts, Minister of Nativeflffairs and Minister of Mines, 7 January 1943, NTS 7681,166/33£, Part I, SOBfi.
16
feelings among the VFPC workers ran high, with some men
charging that "the government has trodden all these promises
under foot .... [with the result that] the position is'
hopeless."<£3) Protesting their wages, workerB at the
Brakpan station refused to accept their new pay checks for
two weeks. <£4) Fearing renewed unrest, the cabinet under
the leadership of Pet ing Prime Minister, J.H. Hofmeyr,
decided at the end of April 1944 that, if the workers did go
out on strike "the Police should arrest all Natives who go
on strike and not merely the ringleaders."<£5)
Despite widespread awareness of such threats, many of
the workers at the Rand power stations advocated resuming
the strike even though their leaders in the African Gas and
Power Workers Union did not support the idea. The union
leaders preferred to try and press their case with Smuts
through the white South African Trades and Labour Council
due to the fact that the government did not recognize the
official existence of the black union.(£6) Although Labour
Council representatives met on behalf of the black workers
<£3) Translation of a Notice of a Meeting submitted to theManagement CVFPC] by the Compound Manager, Simmer Pan, ISApril 1944, NTS £££5, 44£/£8O/l, SABA."(£4) Secretary of Native Affairs to Minister of NativeAffairs, 6 and £0 April 1944, NTS 7681, 166/332, Part I,SABA.<£S> Secretary of Native Affairs to Director of NativeLabour, Johannesburg, £7 April 1944, NTS 7681, 166/33£, PartI, SABA.<£6) Director of Native Labour, Johannesburg to Secretaryof Native Affairs, 27 June 1944, Suspect Staff to DeputyCommissioner SAP, 1O July 1944, NTS 7681, 166/33£, Part II,SABA.
17
with Prime Minister Smuts regarding implementation of the
Commission recommendations, nothing was done — no surprise
to Otley who believed that the whites were "not, in his
opinion, genuine in their desire that this should be carried
out."(£7) Indeed, during tho strike, the white workers had
stayed at their power station posts stopping short only of
"doing work normally carried out by natives."(28) Receiving
no satisfaction from Smuts or the Labour Council, Dick Mfili
tried to rally support among the workers, and unrest among
the employees continued through the end of the war. Such
protest had little effect since Otley, believing that the
union leaders were out of step with their followers and were
"undoubtedly causing serious unrest among our Native
employees, who otherwise would be perfectly content with
their lot" had the most outspoken workers sacked.(£9) While
the system of outright labor repression had been shaken and
proven costly, it still held sway at the power stations
throughout the war.
Despite backing the VFPC over the issue of pay raises,
by the end of the war the government, and the mining
industry, were concerned that the company could no longer
(£7) Minutes of Interview with T.B. Otley, 15 AugustNTS 7681, 166/332, Part II, SABA.(£8) VFPC to Minister of Mines, £6 February 1944, MNW 1144,mm94/13, SABA.(£9) VFPC to Director of Native Labour, 1£ September 1945,and African Gas and Power Workers Union to VFPC, 24September 1945, NTS 7681, 166/33S, Part II, SABA; Personalcommunication to R. Christie from B. Hirson, 7 May 1977 inChristie, Electricity. Industry and Class in South Africa,pp. 140-141.
provide eit
officials a
Escom's inc
eliminate t
1943 he beg
VFPC, claim
Mould be of
gold -mi ning
of the priv
the VFPC.
accumulated
the private
wrath.(31)
flnglo ftrneri
* poundIndustare do>eg uitaby Gov
Namely, the
Oppenheimer
L3 million
Escom agree
assets incl
(30) E6eorn1943, HEN 3;(31) Chris
pp.(32) Notes31 December(33) Ibid.
er reliability or low costs. Instead, government
d company directors turned to Escom. Ever since
ption in 1923, van der Bijl had wanted to
e private company altogether and as early as
n a campaign to take over the assets of the
ng that "... the saving to the Bold Mines alone
the order of L2,000,000 per year."(30) find the
companies were equally eager to rid themselves
te company, backing Escom's efforts to purchase
hen it was revealed that the VFPC had
well over L6 million in profits during the war,
company became the target of the mine owners'
In the words of Sir Ernest Oppenheimer, head of
he V. F. P. policy is to demand their fullof flBsh* and any approaches by the Miningy to the V. F. P. for a revision Cof prices^imed to failure. The only way in which an>le state of affairs can be brought about is-rnment intervention. " (32)
expropriation of the company by Escom which
estimated would save the mining industry L2.5 to
er year.(33) With Anglo's financial backing,
to pay L14.5 million for all of the company's
ding the supply contracts to the mines as well
to Secretary of Commerce and Industry, 19 ftpril39, 508, Volume I, SfiBfi.ie, Electricity. Industry and Class in South113-114.e Power Supply to the Witwatersrand Gold Mines,1946, HEN 564, 70/1/2, SfiBfi.
as contracts for the supply of coal from Anglo Arnerican-
controlled coal mines. Indeed, Anglo American was so
anxious to see Escorn in control that it provided L8 million,
a little more than half of the loan raised to cover the
purchase. Thus with the financial backing of Anglo, Eecom
took possession of the VFPC in June 1948.(34>
Once in control of the electricity supply stations,
Escorn set about altering labor relations in order to keep
costs down without the violent disruptions of the war years.
During the 1944 Btrike, the workers at the Witbank station
had remained at work, as Eecom officials suspected, due to
the fact that they were isolated from the other workers.<3S)
Accordingly, the establishment of all new power stations in
remote areas, near the coal fields, guaranteed the isolation
of the workers from any unrest and allowed the company
greater control over union access to its employees.
Furthermore, the workers at these stations were hired on a
contract basis and housed in compounds, increasing the
company's control. Finally, Escom's operations were
becoming so highly mechanized that the company could
significantly reduce its workforce in relation to
(34) Escom to Secretary of the Treasury, 19 April 1948, HEN3239, 508 volume I, SABA.(35) Otley to Minister of Mines, 86 January 1944, MNW 1144,mm94/13, SABA.
20
production further* simplifying labor relations.(36) Even
by 1959, |espite the establishment of numerous power
stations throughout the country, thB company had not
significartly increased the number of its black employees
above their wartime totals. <37) Learning from itB
experiences, and the mistakes of the VFPC. Escorn formulated
labor policies aimed at reducing and isolating its
potentially unstable black workforce.
Iscor anc
Due to th
faced lab
those at
it© conv
and final
fash ionin
pre-war o
workers —
arrangeme
however,
skilled 1
rolling o
(36) fliblack worelectricimechanizaC 1 A « B in
<37) Mir.fiffairs,
the demands of continuous production
nature of steel production, Iseor's managers
r problems that were far mori complicated than
scorn. Ranging from the mining of iron ore through
sion into raw steel, rolling into workable sizes
shaping into consumer products as well as
and maintaining complicated machinery, Iscor's
Brat ions required both skilled and unskilled
black and white, local and foreign. Due to its
ts with the private steel firm* during the war,
he corporation was able to cut back on its use of
bor. Focussing on the mining of iron ore and the
raw steel into billets, Iscor was able to avoid
lenfrew Christie has pointed out, the number ofers required by Escom to produce 100 megawatts of
fell from EO3 in 1969 to 16S by 197')', due toion. Sea Christie, Electricity. Industry and
th Qfv*ieraT p. 1S1.es meet ing between Escom and Department of Nat ive' August 1959, NTS 9977, 1555/408C, SABA.
£1
increasing its use of skilled labor, especially important in
transforming the iron ore into steel and in finishing
products, while relying instead on unskilled black miners
and semi-skilled white operatives. Ot the same time,
however, the managers of these important operations — the
mines and the rolling mills — had to develop a range of
different labor policies in order to control worker
discontent and protect production. Pressed to maintain
production at these important divisions while facing
shortages of labor and supplies, as well as demands for wage
increases from black and white workers, thB corporation
could not simply intimidate its workers, as had the VFPC,
but rather adopted a more flexible approach, alternating
between coercion and conciliation, in insuring control over
the disparate workforce.
flt the minesa coercion
One of the corporation's most important operations during
the war using the most homogeneous workforce, was its mining
division. In response to military requirements in Europe,
South flfrica agreed to provide the British government with
40,000 tons of iron ore per month from Iscor's own iron mine
at Thabazimbi, almost double its normal output.(38) It was
imperative that production not be disrupted and, owing to
the mine's isolated location in the northern Transvaal and
(38) Minutes Iscor Board of Directors, 4 September 1940,HEN 3£63, S09/8, volume 4B, SOBfl.
its black migrant workforce, the mine managers felt that
they could take drastic steps to insure worker productivity.
Indeed, at the Thabazimbi mine Iecor was able to implement
extremely harsh labor policies without fear of disrupting
production.
The new demands for increased production at Thabazimbi
quickly strained the ability of the management to provide
housing and adequate care for its black workers. The number
of miners jumped from 667 in February 1940 to 2000 in May
1941 while their housing — crude iron buildings — was not
expanded proportionately.(39) These accommodations, termed
"not satisfactory" before the increase in employment,
quickly became intolerable.<40> By May 1941, 2504 cases of
illness — including typhoid fever and pneumonia — were
reported in a six month period while the mine averaged 40
desertions per month — on an annual basis, one quarter of
the workforce.(41) Clearly, mine management needed to
change its policies if order and efficiency were to be
maintained.
<39) Inspection of Mines and Works by Director NativeLabour, IS February 1940, Assistant Native CommissionerPilansberg to Additional Native Commissioner Rustenburg, 30May 1941, NTS 9923, S21/40SC, SABA.(40) Thabazimbi9 Report of Inspection by Senior AssistantHealth Officer, 2 April 1940, Assistant Native CommissionerPilansberg to Additional Native Commissioner Rus.tenbi<rg, 30May 1941, NTS 9923, 521/408C, SABA.(41) Assistant Native Commissioner Pilansberg to AdditionalNative Commissioner Rustenburg, 30 May 1941, Iscor toDirector Native Labour, 19 September 1941, NTS 9923,521/406C, SABA.
But the corporation, beset by production targets and
cost constraints, was more concerned with restraining itB
employees than with improving the conditions of their
employment. The Superintendent of the Thabazimbi Mine,
C.J.N. Jourdan, was thoroughly disgusted with his black
workers and complained in graphic terms of their misconduct
in a letter to the Iscor General Works Manager, Frederick
Meyer in 194£, complaining that they were planting an
"evil root and branch which is besmirching ourbeautiful and peaceful countryside.... It isdisgusting to see strings of natives in all stagesof drunkenness reeling and rolling up ourbeautiful avenue from 4 p.m. onwards on a Sundayevening, many of them tattered and torn as aresult of fights, others bleeding and again easingthemselves on the road as they waddle along and weare powerless to prevent this."(4£>
In attempting to control black workers, Jourdan and hie
white subordinates — against Meyer's wishes — often used
corporal punishment. Such measures were, however,
counterproductive. The Inspector of Native Labourers, I.P.
O'Driocoll, criticized the "terroristic activities" of the
white supervisors and argued that "these assaults must
eventually affect adversely the mine's labour supply and
might be regarded as a predisposing cause of many...
desertions... "(43) In response to such criticism, Jourdan
<4£) Jourdan to Iscor Works Manager, Pretoria, £ April1942, NTS 99S3, 5S1/40SC, SABA.(A3) Assistant Native Commissioner Pilansberg to AdditionalNative Commissioner Rustenburg, 30 May 1941, Iscor toDirector Native Labour, 19 September 1941, NTS 9923,5E1/40BC, SABA.
£•+
argued that more rather than less control over the workers
was necessary and he proposed "to fence in the entire
compound and the entry into and the exit therBfrom of all
Natives will be controlled at a small office to be erected
beside the gate."(44) Furthermore, he requested the
establishment of a police station on the mine property since
"owing to the lack of any arrangements for... punishment,
CtheD.employees without compunction absent themselves from
work without leave or are drunk on duty, or refuse to
work..."(45) The superintendent of the mine hoped
thereby, as many companies had done in the past, to prevent
the blacks from leaving the compound to obtain liquor and,
if that was not possible, to have tham punished severely
with government sanction.
The government complied, providing even greater
supervision over the mine's black workers, although the
workers continued to protest against their conditions of
employment. The Native Affaire Department proclaimed
Thabazimbi a Labour Rresi, necessitating that regular review
take place by a department official whose principal duty was
to collect fees and taxes from black workers — amounting to
approximately L5000 per year.(46) Iscor proceeded with
(44) Assistant Native Commissioner Pilansberg to AdditionalNative Commissioner Rustenburg, SI January 1942, NTS 99£3,521/408C, SABA.(45) Assistant Native Commissioner Pilansberg to AdditionalNative Commissioner Rustenburg, 23 January 1942, NTS 9923,521/408C, SABA.(46) Ibid.
25
building its new, fenced-in compounds and police station,
and in January 1944 the Native Commissioner commented that
the police "had a very deterrent effect on the excessive
beerdrinking and fights on the mines CandD the officials
have proper control over persons, including employees,
entering or leaving the compound."(47) Nevertheless, one
year later, the black miners took the unprecedented step of
going out on strike to protest their low wages and poor
working conditions. <48) The strike was quickly put down by
force, many of the workers being dismissed, and control was
maintained at the mine; the price of such control, however,
was an unstable, everehanging and disgruntled workforce.
On the factory floor: conciliation
Forceful methods of labor control which were effective at
mines in remote parts of the country were not readily
transferable to the corporation's Pretoria plant. fit
Thabazimbi, Iscor could risk firing sin employee who resented
his working conditions! there was little training involved
and as the Native Commissioner noted, "hundreds of Natives
were waiting outside the Compound for work."(49) fit
(47) Assistant Native Commissioner Pilansberg to additionalNative Commissioner Rustenburg, £ February 1944, NTS 9923,521/408C, SABA.(48) Assistant Native Commissioner Pilansberg to AdditionalNative Commissioner Rustenburg, E3 April 1945, NTS 99S3,S21/408C, SABA.(49) Assistant Native Commissioner Pilansberg to AdditionalNative Commissioner Rustenburg, e February 1944, NTS 99£3,521/408C, SABA.
Pretoria, however, Iscor employed a much wider range of
workers: highly skilled foreign artisans and semi-skilled
local whites under union agreements as well as many black
workers who performed jobs requiring training on specialized
machinery. <50> None of these workers was easily replaced.
Furthermore, at the Pretoria plant, unlike the Thabazimbi
mine, production was already unsettled due to problems in
obtaining supplies which were essential for operation,
sometimes requiring unreliable imports of raw steel for
rolling. find likewise, plant production often shifted from
one type of steel to another due to military requirements.
Pit Thabazimbi, Iscor suffered from no such problems, simply
mining iron ore on a continuous basis. The corporation
could ill afford one more uncertainty at Pretoria — a high
labor turnover accompanied by long training periods — to
disrupt the essential production of steel billets for its
partners and indeed for South flfrica's war effort. With
most other factors of production in flux, Iscor's management
needed stability in the factory workforce.(51)
(30) Report of the Shirt Sleeve Committees Appointed by theConciliation Board, re jobs to be taken over by GeneralLabourers, IS July 1937, ORB S71, LC 105E/173/E, SfiBfi.<51) My conceptualization of the problems encountered onIscor's factory floor was influenced by Michael Burawoy'sdiscussion of the relationship between "economics ofshortage," in socialist economies as well as in wartimesituations, and the politics of the production process. SeeMichael Burawoy, The Politics of Production: Factory RegimesUnder HAnital iqm anrl Socialism (London, 1335) and JanosKornai, Thp ^ponomics of Rhortagp (New York, 1980).
£7
Early in the war, Iscor brought its most most skilled
workers under strict control. Highly trained white artisans
were in great demand by the armed services as well as by the
mining and engineering industries. Consequently, they could
Dick and choose their jobs with ease at the beginning of the
war. The government quickly moved to control the mobility
of these workers, however, because of their importance to
the country's war effort. fit van der Eijl's request, in his
capacity as Director General of War Supplies, Prime Minister
Smuts in March 1941 placed all artisans in the country under
the supervision of the Controller of Industrial Manpower.
The Controller not only fixed standard conditions of
employment throughout the country but also had the power to
direct men to work at certain firms. Iscor soon benefitted
from the new regulations as the Controller of Industrial
Manpower gave the corporation the highest priority for
obtaining men due to its pivotal role in defense
production. (52) Thereafter, although some disputes arose,
these workers were forced to accede by threat of legal
sanctions to the arbitration of their grievances. <53) Their
wages were set fairly high, however, to compensate for
official control and Iscor never substantially increased
their numbers during the war. These regulations did not
<5£> DGS Circular, 1 February 1344, MED £8,(53) In May 1942, Iscor's mechanics threatened to go onstrike when their hours were reduced but were persuaded bytheir union to negotiate with the Corporation* Inspector ofLabour to Secretary of Labour, SO May 194£, ORB 1106, LC1058/121, Part 4, SOBfi.
ea
apply, however, to a large number of Iscor'B artisans who
were German and were considered to be enemy aliens subject
to internment after the declaration of war on Germany in
September 1939. Rather than lose those workers, Iscor
established a separate workshop for thB Germans who
performed important repair work on Iscor plant. <54) In
their rather tenuous situation, the Germans proved easy to
control and relatively cheap to employ, prompting the Iscor
Board of Directors to continue operation of their workshop
even after the war.(55) Thus throughout the war, Iscor,
benefitting from the support of state officials, enjoyed
relative peace and stability in its relations with its most
skilled white workers.
But skilled workers were still relatively scarce during
the war and Iscor became more dependent upon its semi-
skilled, or operative, labor, especially at the rolling
mills where the billets were produced. These workers were
mostly local whites who had some training in operating the
rolling machines which produced Iscor's steel billets.
Although they were not highly trained, they were responsible
for producing the bulk of Iscor's products during the war.
The corporation had tried to replace these whites with
blacks prior to the war, hoping to put into place a more
malleable and cheaper workforce; and it had succeeded in
<54> Iscor to Secretary of Commerce and Industries, 9September 1948, HEN 3274, 509/19, SRBfi.<55) Minutes Iscor Board of Directors, S3 May 1945, HEN3E66, 509/6, volume 70, SABP..
£•9
filling 60% of the factory positions with blacks.
Nevertheless, at the outbreak of the war, the white
operatives still held pivotal positions on the factory
floor. They were neither under the direct control of the
government — as were the artisans — nor were they denied
official recognition as were the black workers. While Iscor
could not invoke government power against them, it could
neither ignore their demands. Under wai—time conditions of
strained supply and shifting production, these workers began
to enjoy art increasing leverage over Iscor's management
which translated into a greater security in their position.
Indeed, in 1941 the white operatives went out on strike
at the rolling mills over the issue of security. The strike
began when Iscor laid off one shift of men at the heavy
rolling mill. The corporation had shut down its blast
furnaces for maintenance and, as it could neither produce
nor import enough steel to keep the mills working at full
production, the mill manager fired the men. In protest, the
other two shifts went out on strike bringing operation of
the plant's major productive division — where all of the
billets for Iscor's partners were produced — to a
standstill. <56) One hundred men were involved in the strike
and they demanded that Iscor guarantee their hours of work,
and hence their pay. <57) The Iscor Beneral Works Manager,
(56) "Dispute at Iscor, " Stan, 6 June 1941.<57> Ihiri.; "100 Men in Dispute at Iscor," Rand Daily Mai],7 June 1941.
30
Dr. Frederick Meyer, claimed that this was impossible due to
wartime difficulties in supplies and furthermore, that the
workers had no right to strike. He rebuked and threatened
the workers, stating that "If these men on strike leave
Iscor they will be going back to unskilled work as they are
not artisans but rollers and should not take up the attitude
of striking."<5S) The workers stayed out on strike.
Meyer could not make good on his threat and, rather
than dismiss the workers for going out on strike, he
capitulated to their demands. Facing the reality of firing
one hundred men, retraining new employees and running the
risk of concerted action by the other operatives, Meyer
reached a compromise with the workers. He took the
extraordinary step of establishing art unemployment insurance
fund for the operatives. In cooperation with their union,
the South African Iron and Steel Trades Association, Iscor
contributed equally with the employees to create the "Iscor
Daily Paid European Employees Lay-Off Wages Insurance
Fund."(59) Thus these workers were guaranteed their wageB
even if Iscor had to dismiss them due to production
problems. Acknowledging that it could not easily replace
these men, Iscor agreed to increase the security of their
posit ion.
(5fl) Minutes Industrial Council for the Iron and SteelManufacturing and Engineering Industry, Transvaal, 6 June1941, ARE 1109, LC 105S/1S1/2GII, SftBA.(59) Minutes Iscor Board of Directors, 28 June 1950, HEN3270, 509/8, Volume 10B, SABA.
31
But while the corporation had gone far in placating the
white operatives, it soon moved to undermine their position
at the important rolling mills, essentially by "deskilling"
the labor hierarchy at those divisions. In 1544, the Iscor
Board of Directors decided to leave the Industrial Council
for the Engineering Industry and establish a separate
council exclusively for Iscor; Meyer, as the corporation's
representative, soon succeeded in fashioning a new labor
agreement that radically altered the labor force- The new
agreement reflected not only an increase in the number of
all employees at the mills — due to the successful
completion of plant extensions — but also a significant
shift in the conditions of employment for white operatives
including their level of training as well as the wages they
would receive. While the white operatives' union was
satisfied that standard wages for whites throughout Iscor
increased, from a median level of Is.lOd. per hour to £s.Ad.
per hour, it acceded in the creation of a group of new
positions — all located in the mills where plant production
was centered — which averaged only Is.Gd. per hour, equal
to new trainees* wages. Furthermore, in order to receive
the standard wages detailed in the new labor agreement,
white employees had to spend a considerably longer period in
"training" — at lower wages — than they had under the old
agreement. In previously established jobs, the increased
training period was commensurate with the growth in wages —
about one third increase in both — thus really offering no
gain for the workers involved. find in the new positions at
the mills — the least skilled of all positions at Iscor —
workers had to wait 450 shifts for their basic wages rather
than £OO shifts previously set as the corporation's basic
training period.(60) Thus Iscor delayed payment of higher
wages to its longstanding employees while creating less
skilled and less expensive positions for its new employees.
While Meyer had acceded to the use of white operatives on
the factory floor, he had also found a way to make them less
expensive to hire and more easily replaced.
Under these circumstances, the corporation began to
hire more — and cheaper — white workers as, for the first
time in the corporation's history, white employment began to
rise faster than black. <61) Since 1934, the percentage of
white workers had steadily dropped from 55% to 38% in
1940. <62> Yet by 1944, with the Iscor labor force more than
doubled, the percentage of whites had risen to 49%. (63) find
(SO) Iscor Labour Agreements, Government Notice no. 912,Government Gazette 21 May 1943 and Government Notice No.1530, Government Gazette 15 September 1944.(61) Despite the shortage of white artisans, white workersin general were not in especially short supply during thewar due to the voluntary nature of military service in Southfifrica. In fact, even in 1940, the South African militarybegan to have serious problems attracting sufficient numbersof whites. See Martin and Orpen, South flfrica at War, pp.72-83.<S£) Minister of Commerce and Industries to van der Bijl,July 1934, MED 8, CI34) Tisma Membership, 23 May 1940, ORB1106, LC 1058/121, Part III, SRBfi.<63) Notes on Conditions of Employment in Works, September1944, MNW 1135, mm 66/19, SOBfi.
33
only a small part of the white workforce — 13% — was
skilled, most of the growth in white employment being
attributable to white operative labor.(64) Having found a
method for controlling the white operatives — a mixture of
conciliation and desk!11 ing — Iscor finally gave an
appearance of commitment to the old policy of "civilised
labour."
fit the same time, the Board of Directors began to
understand the consequences of their reliance on black labor
in the plant. fit the beginning of the war, three unions
claimed to represent black workers in the engineering
industry and one — the Non—European Confederation of Iron,
Steel and Metal Workers Union — continued throughout the
war to press claims for higher wages for blacks. (65)
Indeed, wartime inflation — hitting black consumers hardest
— spurred demands for higher wages in all industries, as
van der Bijl was already well aware as a result of
developments at Escom. Nevertheless, throughout the war,
(64) Iscor, "Basic Rates of Pay of Journeymen and Value ofAllowances and Privileges Expressed as the Value per hourworked," c. 1945, Papers of the Industrial ManpowerCommission, Be 825, University of Cape Town.(65) Divisional Inspector of Labour to Secretary of Labour,3 August 1939, ORB 1103, LC 1058/121-4j SO Non-EuropeanConfederation of Iron, Steel and Metal Workers Union toDepartment of Labour, 14 October 194S, ORB 1103, LC1058/121-7; SO Non—European Confederation of Iron, Steel andMetal Workers Union to Chamber of Mines Steel Products, SDecember 1943, ORB 1103, LC 1058/121-65 SO Non-EuropeanConfederation of Iron, Steel and Metal Workers Union toDepartment of Labour, 17 January 1945, ORB 1103, LC1058/l£l-6, SOBO.
34
the government refused to recognize the black unions.(66)
Even without official recognition of the unions, worker
demands prompted Iscor to raise the wages of its General
Labourers — black factory workers — four times nearly
doubling their hourly rate.(67) Indeed, even at the end of
1944, the General Business Manager had complained to the
Iscor Board of Directors about the rising cost of black —
but not white — labor as one of the corporation's principal
problems in accumulating any profit.(68) Unable to mollify
black demands as they could white through union negotiated
compromises over conditions of labor Iscor's managers and
directors chose to raise black wages, as well as to depend
on white workers' to a greater extent, in order to insure
peace and productivity.
Despite the growth in white labor, Iscor maintained its
production cost per unit until the end of the war. The cost
had jumped at the beginning of the war, due to the shift in
production to billets; however, once the ratio of white
(66) "Besware teen Iecor, " Din? Burger, 12 April 1939;Minutes Industrial Council for the Iron and SteelManufacturing and Engineering Industry, Transvaal, 6 June1941, flRB 1109, LC 1058/121/2GII, SfiBfi.(67) Hourly wage rates rose from a pre-war figure of 4 l/2dto 7 l/2d in 1946. Iscor Labour Agreements, GovernmentNotice no. 707, Government Gazette 7 May 1937, GovernmentNotice no. 912, Government Gazette 21 May 1943, GovernmentNotice No. 1S30, Government Gazette 15 September 1944 andGovernment Notice No. 2389, Government Gazette 15 November1946. Although Iscor was not a party to the 194'6 industrialagreement, the corporation accepted many of the terms in theagreement including wage rates for General Labourers.(68) Minutes Iscor Board of Directors, 27 September 1944,HEN 3266, 509/8, Volume 7ft, SfiBP..
35
employees began to rise, there was no further erosion in the
coproration'a profits. This was partly due to the fact that
while the growth in white employment was dramatic compared
to the corporation's pre—tftar attempts to decrease the number
of white workers, the bulk of the factory workforce remained
low paid black workers. find although the new white workers
earned far more than any blacks, they still earned
significantly less than the skilled workers whose numbers
were not increased in proportion to the entire workforce.
Moreover, the expansion in Iscor's overall production
created economies of scale which offset increased labor
costs. Thus Iscor's policies succeeded in stabilizing
production at its mills as well as protecting the
corporation's financial position.
By the end of the war, Iscor was moving quickly to
establish a new basis for labor relations. Before the war,
thB corporation had been moving toward the introduction of
black labor on the factory floor and away from the
relatively unskilled white workers Hert2og's government had
tried to force upon the corporation. By the end of the war,
the situation had reversed and van der Bijl planned to base
his new operations on the white workers, providing them with
minimal training. Indeed, the corporation's new factory, to
produce steel as well as heavier machinery, was to employ
almost exclusively operatives paid by the piece as well as
36
unskilled workers.(69) In order to control these workers,
in addition to the complicated labor agreements fashioned by
the corporation, van der Bijl also planned to locate new
operations where the workforce could be isolated; in a nBW
town completely controlled by Iscor. VanderBijl Park was
envisioned by H.J. van der Bijl as a sort of benevolent and
idyllic workers' town complete with sports facilities,
schools and health care for workers; that is, white workers.
Van der Bijl went as far as considering the elimination of
South African currency, instead substituting currency issued
by Iscor for use in the town.(70) Despite the vaunted
idealism of his early plans, van der Bijl's dream still
amounted to a company town in which workers could be closely
controlled by their employer, And these workers were to be
operatives almost entirely, except for those unskilled black
workers to be housed in the nearby township of Sharpeville.
Isolating the workforce, providing the workers with only
specialized training and insuring that their labor contracts
undercut their position, Iscor hoped to pay a small price
for continuing production.
The Inception of the IDCi The New BaslB for Industrial
Growth
(69) Veeor to Controller of Industrial Manpower, 22 March1945, ORB 1770, 1612/1/17-6J; Chief Inspector of Labour tothe Controller of Manpower, 23 March 19A3, ORB 1770,1612/1/17-6J, SABA.(70) Private communication, Alice Jacobs, 12 October 1983.
37
Nowhere was the change in the state corporations better
exemplified than in the operations of the newest state
corporation, the Industrial Development Corporation. Also
chaired by van der Bijl, the IDC was established in 1339 to
lure overseas investment capital into local ventures. The
IDC was to fund the establishment of private, not state,
corporations in partnership with private businessmen; at the
time of its establishment in 1939, this approach conformed
to van der Bijl's hopes of closer cooperation with private
capital. During the war years, however, the IDC was
constrained by the inavailabi1ity of plant as well as of
investment capital and under the supervision of its Managing
Director, H. J. van Eck, the IDC worked at studying the long-
term potential of import substitute industries in South
flfriea.(71) By the end of the war, van Eck had completed
plans for the establishment of several private industrial
ventures including the manufacture of textile yarns, food
yeast, paper (pulp), and rnasonite. (72) fill of these
ventures were to be established by the IDC in cooperation
with foreign firms, and in one case with the Anglo American
<71) At the same time, van Eck was chairman of theIndustrial and Agricultural Requirements Commission and theSocial and Economic Planning Council which were also engagedin similar studies of South Africa's long—term economicpotential. In 1944 he succeeded van der Bijl as chairman ofthe IDC. See Chapter V for a fuller discussion of van Eckand the IDC.<72> Minutes IDC Board of Directors, 3 November 1943, HEN3212, 506/1/5, Volume 2? Minutes IDC Board of Directors, 4,3July and 3,4 October 1945, HEN 3213, 506/1/5, Volume 3,SABA.
Corporation, but none were allowed a marketing partnership;
the private partners were expected to put up money and to
get dividends, but not a share of the new markets, in
return. Furthermore, all of the new industries constituted
monopolies inside the country, their only competition coming
from imports- (73)
The IDC was also well aware of the importance of labor
to any incipient industry and in the case of the only
enterprise which it actually brought to fruition during the
war years — the textile yarn industry — it opted for rural
black workers, fill of the factors concerning labor in the
textile industry were carefully set forth in 1942 in a
detailed memorandum, "Location of the Cotton and Wool
Spinning Plant," prepared for the IDC by its Technical
Adviser, A. Cornish-Bowden. His proposal was based on the
premise that "the textile industry must be considered in the
spinning and weaving stages at any rate, to be almost
entirely a native industry." accordingly, he advised that
"The locality must be such that labour conditions in
(73) The IDC planned to establish a wool processingindustry in cooperation with the National Wool GrowersAssociation, but were never able to obtain the requiredcapital from the Association which had trouble raising itfrom its members. IDC to Minister of Commerce and Industry,17 August 1942, HEN 3201, 306, Volume 2, SABA. And the IDCalso originally planned to establish a cotton weavingproject with Union and Congo, Ltd., a Johannesburg firm, butin 1944 the IDC Chairman, H. J. van Eck advised the Board toturn down the private company's proposal as being"uneconomic" and the IDC decided to go it alone. MinutesIDC Board of Directors, 7 December 1944, HEN 3213, 506/1/3,Volume 3, SABA.
39
existing industries in the area are not upset by such a
policy," that is, the use of black operatives in the
factory. Therefore, he advised that rather than ship black
migrant workers into the already industrialized cities, the
industry should move to the rural areas. However, some rural
locations were discounted, especially those near white farms
because the new industry "would create competition with farm
labour. This is deemed undesirable in consideration of the
present state of the farming community." The ideal
location, according to Cornish-Bowden, would be in atn area
with "... a settled native population in the vicinity upon
which to draw, and a larger hinterland of native reserves,
etc., which can be drawn upon in the future and in which
products can be marketed." Under these conditions, the
workers would not be "transient and a tradition of life-long
employment can be built up amongst the population in the
area. Natives must not always be wanting to return to their
kraals..." Rather than give the impression that such a
location might also be used to improve the economic
conditions of the black community, however, h© ended his
memorandum with the injunction that
"It must be remembered that our job is firstand foremost to promote efficiency in the spinningand weaving of cotton and wool. To mix this jobtoo intimately with the broader issue of thenational development of the natives is undesirablein that it will detract the attention of themanagement from the issue of industrial andtechnical efficiency."(74)
(74) ft. Cornish-Bowden, IDC Technical Adviser to IDCManaging Director, 14 July 1942, SEC 105, 50S/1, SABfi.
40
Using black rural workers was good business, not social
policy.
By 1944, the IDC was prepared to make a decision
concerning the location of the textile plants and, following
Cornish-Bowden'B suggestions, placed them next to large
Native Reserves. Noting the low wages at Uitenhage, in the
eastern Cape near the Transkei and Ciskei reserves, the IDC
decided in 1944 to establish its wool processing industry
there. It went even further with its cotton spinning plant,
established in neighboring Kingwil1iamstown, "within the
native territories on land to be leased from the Native
Trust," which it touted as providing "Industrial employment
for native families in their home area and an alternative
livelihood for those natives who are unable to get adequate
support from the soil."<75> The Native Trust agreed to
build "a model settlement village" nearby, both drawing in
workers and relieving the IDC of the cost of housing. The
IDC wanted to use black operatives and to assure itself a
vast labor pool; it could do so by locating its operations
in the rural areas near the supply of cheap and plentiful
labor.
By the end of the war, all three state corporations had
changed course) iBeor and Escom were moving away from their
(75) Minutes IDC Board of Directors, 7 December 1944, HEN3213, 506/1/5, Volume 3, SOEO.
41
old labor policies, and the IDC was preparing itself to play
a major role in South flfrica's industrial expansion. The
war had increased pressures on the state corporations to
insure production arid they responded by formulating labor
policies designed to withstand the most difficult
circumstances. In the wake of the potentially devastating
strike in 1944, Escom moved to fragment, isolate and, as far
as possible, reduce its workforce in order to lessen the
company's vulnerability to labor unrest, find Iscor, fearing
the leverage of individual factory workers who could stop
the entire corporation's operations by simply walking off
the factory floor, sought to placate, undermine and in any
way possible control those workers. Whether in a company
town, such as Vanderbijl Park, or at a remote power station
in the northern Transvaal, workers were to be increasingly
controlled rather than openly intimidated in order to
prevent unrest before it occurred. These concerns were
foremost in the minds of IDC planners as they contemplated
introducing entire new industries into South flfrica. Their
policies, borrowing from the wartime experiences of Iscor
and Escom, were a combination of methods used before and
during the wan To provide limited training to the cheapest
available labor in the most remote setting. Rather than
demonstrating the power of theBe state corporations over
their workforces, their postwar policies in fact revealed
the significant amount of power which workers held over the
corporations through protests and the withdrawal of labor.